This chapter discusses product and brand decisions for international markets. It covers defining a company's product offering, including core benefits, expected products, and augmented products. The chapter also discusses different types of products, branding strategies, and adapting products versus standardizing them across markets. Key aspects that can be modified for different markets include product attributes, packaging, quality, positioning, and after-sale services. The chapter provides examples of companies that use global, international, local, and private label branding approaches.

1. 10-1
Chapter 10
Product and
Brand Decisions

2. 10-2
Introduction: What to Sell ?
The international marketer needs to
determine what the market offering should
be in a foreign market :
– Defining the product offering
– Products versus Services/Rights

3. 10-3
The Product Offering
Core Benefit
Generic Product
Expected Product
Augmented Product
Potential Product
Source : Adapted from: P. Kotler, Marketing Management, 1994

4. 10-4
Basic Product Concepts
A product is a good, service, or idea
– Tangible Attributes
– Intangible Attributes
Product classification
– Consumer goods
– Industrial goods

5. 10-5
Product Warranty and Service
Product Warranty :
– Should a company keep the same warranty for
all markets or adapt it country by country ?
– Should the firm use warranty as a competitive
weapon ?
Product Service :
– Service capability to accredit the firm with
foreign suppliers
– high investment in facilities, staffing, training,
and distribution network

6. 10-6
Goods versus Services/Rights
Instead of marketing a product abroad, the
company may also sell rights or services in
a foreign market:
- rights : brand / trademark / patent
- services : management skills (hotel chain)

7. 10-7
Sales of Rights - Examples
Franchising business :
- Coca-Cola : use of its name to licensed
bottlers around the world.
- Pilkington: licensing of the process of
float glass.
- Other : Manpower, McDonald's, etc.

8. 10-8
Sales of Rights - Examples
Management Contracts :
- Sheraton Hotels :
• Management contract for hotels abroad
• Sale of consulting and management contracts
• Little equity invested : Sheraton manages almost
400 hotels worldwide but has equity in only 40 of
them.
• Advantages : minimum risk & strong competitive
position.

9. 10-9
Sales of Rights - Examples
Turn-Key operations :
–The firm is selling technical and engineering skills.
–The firm is training foreign nationals to run a plant.
–The firm is supplying material and equipment.

10. 10-10
International Product Strategies
Straight
Extension
Product Product
Adaptation Innovation
The firm adopts the
same policy used in
its home market.
The company caters
to the needs and wants
of its foreign customers.
The firm designs a
product from scratch
for foreign customers.
Source: W.J. Keegan, Multinational Product Planning: Strategic Alternatives,
Journal of Marketing, 33, 1969, pp.58-62

11. 10-11
Extend, Adapt, Create: Strategic
Alternatives in Global Marketing
Extension – offering product virtually
unchanged in markets outside of home
country
Adaptation – changing elements of design,
function, and packaging according to needs
of different country markets
Creation – developing new products for the
world market

12. 10-17
Standardization versus
Customization
Although the products sold abroad
generally are not identical to their domestic
counterparts, there is always a core of
expertise that the firm can carry abroad.
Principle " All Business is local."

13. 10-18
Reasons for Product Standardization
Economies of scale : Production, R&D, Marketing
Common Consumer
needs : Drinking patterns, car sizes
Consumer Mobility : Customer retention & Loyalty
American Express, Kodak, ...
Home Country Image : US jeans, French Perfumes,...
Impact of technology : B to B Markets

14. 10-19
Convergence in Drinking Patterns

15. 10-20
Convergence of Car Sizes

16. 10-21
Reasons for Product Adaptation
Climate: US Air-conditioning equipment
Skill level of users : Computers in Africa
National consumer habits :
- front-loading/top-loading washing machines
- car models : four-door (F) - two-door
(Germ.)
Government regulations on products,
packaging, and labels.
Company history and operations (subsidiaries)

17. 10-22
Example:
European Toothpaste Market
Market Size in France:
FF 1,8 Bill. (1996)
Trends:
– Multiple number of
toothpastes/family
– Therapeutic /
sophisticated products
– Cosmetic products
– Volume
– Price
Competitors in France :
– Unilever 33%
– Colgate 22,5%
– Henkel 19%
– Smithkline B. 12%
– P&G 0%

18. 10-23
Drivers of Product Adaptation
Example COLGATE Toothpaste
(1) Differences in National Regulations
– Triclosan forbidden in Germany
– High fluorine content in local water (UK)
– Obligation to sell high fluorine content
toothpaste in pharmacy (France)
– Stringent clinical tests in France

19. 10-24
Drivers of Product Adaptation
Example COLGATE Toothpaste
Packaging:
– Ecological Stand-up tubes in Germany
– Failure in France (Carrefour)
Distribution:
– Role of pharmacy in Italy and Spain
– Role of drugstore in UK
Communication:
– Medical in Italy and Spain (recommended by
dentist)
– Non-medical in UK

20. 10-25
managing
marketing
from global headquarters
©2005 Dr.Gerard Ryan, Universitat Rovira i Virgili.
International Marketing Mix Decisions
Strategic Alternatives in international and
global marketing mix decisions. Managerial issues
What aspects of Product can be modified?
 Attributes
 Brand (Global vs. Local)
 Packaging
 Quality
 Services (after-sale services, support)
 Positioning

21. 10-26
managing
marketing
from global headquarters
©2005 Dr.Gerard Ryan, Universitat Rovira i Virgili.
International Marketing Mix Decisions
Strategic Alternatives in international and
global marketing mix decisions. Managerial issues
Advantages and Disadvantages of International Brands
 Strong customer recognition/reassurance
 Economies of scale and scope
 Leverages power with retailers
 Consolidates efforts across countries
 Potential for extension
 Not locally responsive
 Demotivating for country managers
 Difficult to manage
 Need to maintain consistency across
countries and product-lines

22. 10-27
Product Types
Buyer orientation
– Amount of effort expended on purchase
– Convenience
– Preference
– Shopping
– Specialty

23. 10-28
Brands
Bundle of images and experiences in the
customer’s mind
A promise made by a particular company
about a particular product
A quality certification
Differentiation between competing products
The sum of impressions about a brand is the
Brand Image

24. 10-29
Brands

25. 10-30
Brands
The added value that accrues to a product as
a result of investments in the marketing of
the brand
An asset that represents the value created by
the relationship between the brand and
customer over time

26. 10-31
Brands
“We have to shift to high value-
added products, and to do that we
need to improve our brand.”
- Noboru Fujimoto, President Sharp Electronics
Corporation

27. 10-32
Local Products and Brands
Brands that have achieved success in a
single national market
Represent the lifeblood of domestic
companies
Entrenched local products/brands can be a
significant competitive hurdle to global
companies

28. 10-33
International Products and Brands
Offered in several markets in a particular
region
– ‘Euro-brands’

29. 10-34
Naming your product
Alu-Fanny: French Foil wrap
Crapsy Fruit: French cereal
Kum Onit: German pencil sharpeners
Plopp: Scandinavian chocolate
Pschitt: French lemonade
Atum Bom: Portuguese tuna
Kack: Danish sweets
Mukk: Italian yogurt
Pocari Sweat: Japanese sport drink
Poo: Argentine curry powder

30. 10-35
Naming your product
 Phonetic Problems with Brand Names
- Bardok (Sounds like Brothel in Russian)
- Misair (Sounds like Misery in French)
 Translations
Intent Translation
- Stepping Stone - Stumbling Block
- Car Wash - Car Enema
- Highly Rated - Over Rated
Symbols
- Owl - Bad Luck in India
 Other Countries make mistakes too
- Zit (Chocolate from Germany)
- Koff (Beer)

31. 10-36
Global Products and Brands
Global products meet the wants and needs
of a global market and is offered in all
world regions
Global brands have the same name and
similar image and positioning throughout
the world

32. 10-37
Global Products and Brands
A multinational has operations in different countries.
A global company views the world as a single
country. We know Argentina and France are
different, but we treat them the same. We sell them
the same products, we use the same production
methods, we have the same corporate policies. We
even use the same advertising—in a different
language, of course.
- Alfred Zeien Former Gillette CEO

33. 10-38
Family Brands
Family Brand
Volkswagen
USA Europe Mexico
"Rabbit" "Golf" "Caribe"
-> lightness -> prestige -> avoid negative
connotation

34. 10-39
Private Label Branding
Large retailers are moving increasingly into
their own brand, i. e. Marks &Spencer.
They try to obtain greater control and
higher margins.
Private branding can be an effective way to
break into foreign markets.
(Asian TV manufacturers)

35. 10-40
European Consumer Preferences
Regarding Private Labels
Product Category Fr. All. It. Es. GB
Edible Oils
Pasta
Yoghurt
Frozen Vegetables
Fresh Pasta
Breakfast Cereals
Instant Soups
Icecream
Whiskey
Smoked Salmon
Champagne
19
16
14
5
3
4
3
6
3
3
3
20
24
14
11
7
8
9
10
1
4
4
10
12
6
5
4
2
0
4
2
1
2
11
12
6
6
3
2
2
2
1
1
3
27
24
12
34
5
18
14
21
4
2
6
Private labels per product category (% of sales in qunqtities in hypermarkets and supermarkets)
Source: Secodip International, 1998

36. 10-41
European Households Judging
Credibility of Private Labels
Private labels per product category (% of sales in qunqtities in hypermarkets and supermarkets)
Source: Secodip International, 1998
Europe Germ. Spain France Italy UKCriteria
3
19
78
3
12
85
3
26
72
3
29
68
1
13
86
More expensive
Same
Less expensive
2
16
83
5
78
17
2
90
8
3
78
19
7
71
22
4
77
18
Higher quality
Same
Lower quality
6
73
21
6
74
21
3
84
12
4
73
23
10
66
24
5
74
21
More confidence
Same
Less confidence
7
71
22

37. 10-42
Country of Origin effect
Country-of-Origin (COO) Influences on Consumers
– For many products, the “made in” label matters a
great deal to consumers.
Key research findings of
COO effects:
•COO effects are not stable
•Consumers prefer domestic
products over imports
•Both the country of design
and the country of
manufacturing/assembly play
a role in consumer attraction.

38. 10-43
Branding Strategies
Combination or tiered branding: allows marketers
to leverage a company’s reputation while
developing a distinctive identity for a line of
products
– Sony Walkman
Co-branding features two or more company or
product brands
– NutraSweet and Coca-Cola
– Intel Inside

39. 10-44
Branding Strategies
Brand acts as an umbrella for new products
– Example: The Virgin Group
• Virgin Entertainment: Virgin Mega-stores and MGM Cinemas
• Virgin Trading: Virgin Cola and Virgin Vodka
• Virgin Radio
• Virgin Media Group: Virgin Publishing, Virgin Television,
Virgin Net
• Virgin Hotels
• Virgin Travel Group: Virgin Atlantic Airways, Virgin
Holidays

40. 10-45
Global Brand Development
Questions to ask when management seeks
to build a global brand:
– Will anticipated scale economies materialize?
– How difficult will it be to develop a global
brand team?
– Can a single brand be imposed on all markets
successfully?

41. 10-46
Global Brand Development
Global Brand Leadership
– Using organizational structures, processes, and
cultures to allocate brand-building resources
globally, to create global synergies, and to
develop a global brand strategy that coordinates
and leverages country brand strategies

42. 10-47
Global Brand Development
Create a compelling value proposition
Think about all elements of brand identity and
select names, marks, and symbols that have the
potential for globalization
Research the alternatives of extending a national
brand versus adopting a new brand identity
globally
Develop a company-wide communication system

43. 10-48
Global Brand Development
Develop a consistent planning process
Assign specific responsibility for managing
branding issues
Execute brand-building strategies
Harmonize, unravel confusion, and
eliminate complexity

44. 10-49
Local versus Global Products and
Brands: A Needs-Based Approach
Physiological
Safety
Social
External/Internal
Esteem
Self-actualization

45. 10-50
Country of Origin as Brand Element
Perceptions about and attitudes toward
particular countries often extend to products
and brands known to originate in those
countries
– Japan
– Germany
– France
– Italy

46. 10-51
Packaging
Consumer Packaged Goods when the
packaging is designed to protect or contain
the product during shipping
Eco-Packaging because package designers
must address environmental issues
Offers communication cues that provide
consumers with a basis for making a
purchase decision

47. 10-52
Product Packaging and Labeling
Protection
Legal ConstraintsPromotion
Climate
Transport & Handling
Buyer's slow usage rate
Lack of storage facilites
Merchandising ( income level, shopping habits)
Minimum breakage / theft
Ease of handling
Multilingual Labels to Convey an International
Image (Zara, Hollywood Chewing Gum)
Recycling of Packaging
(Duales System, Eco-Emballage)
Regulations on consumer info.
(Origin, weight, ingredients)

48. 10-54
POM brand
Pomegranate
juice used a
distinctively
shaped bottle to
gain attention on
the grocery shelf

49. 10-55
Labeling
Provides consumers with various types of
information
Regulations differ by country regarding various
products
– Health warnings on tobacco products
– American Automobile Labeling Act clarifies the
country of origin, and final assembly point
– European Union requires labels on all food products
that include ingredients from genetically modified
crops

50. 10-56

51. 10-57
As Americans become
increasingly concerned
about cholesterol, the
FDA (Food and Drug
Administration) has
responded by requiring
food manufacturers to
list trans fat (i.e., trans
fatty acids) on the
Nutrition Facts portion
of product labels,
effective 1/1/06.
Labeling

52. 10-58

53. 10-59
Aesthetics
Global marketers must understand the
importance of visual aesthetics
Aesthetic Styles (degree of complexity
found on a label) differ around the world

54. 10-60
Product Warranties
Express Warranty is a written guarantee that
assures the buyer is getting what they paid
for or provides a remedy in case of a
product failure
Warranties can be used as a competitive
tool

55. 10-61
New Products in Global Marketing
Pursue opportunities in competitive arenas
of global marketplace
Focus on one or only a few businesses
Active involvement from senior
management
Ability to recruit and retain best employees
Understand the importance of speed in
bringing product to market

56. 10-62
Identifying New Product Ideas
What is a new Product?
– New to those who use it or buy it
– New to the organization
– New to a market

57. 10-63
The International New Product
Department
How big is the market for this product at various
prices?
What are the likely competitive moves in response
to our activity?
Can we market the product through existing
structure?
Can we source the product at a cost that will yield
an adequate profit?
Does product fit our strategic development plan

58. 10-64
Testing New Products
When do you test a new product?
– Whenever a product interacts with human,
mechanical, or chemical elements because there
is the potential for a surprising and unexpected
incompatibility
Test could simply be observing the product
being used within the market

59. 10-65
Looking Ahead
Chapter 11 Pricing decisions